Tuesday, July 9, 2013

I am proud to have been associated with the Bitcoin Foundation since its
launch just nine short months ago. A nonprofit organization for Bitcoin
can add greatly to the political and economic discourse for
cryptographic money and monetary freedom. As Executive Director, I
welcome the new challenge.

The Foundation has never claimed to represent all of Bitcoin nor all
of its users because that would be impossible for any organization.
Rather, the Foundation has consistently attempted to fill the gap where
market-based incentives may not have produced the same outcome, such as
in the areas of specialized grants and compensation transparency for
volunteer developers as well as legal challenges to bitcoin usage and
the sponsorship of aggressive legal defense.

For instance, we made our "cease and desist" correspondence with the
State of California publicly available which can assist bitcoin
exchanges and other bitcoin organizations in the future. Also, we intend
to file amicus briefs in significant bitcoin-related legal cases and to
offer pro bono legal defense where appropriate. In the next 30 days, we
are scheduled to submit comments to FinCEN's guidance and request for
industry feedback on rulemaking. This will be made publicly available
too.

The Foundation is not pro-regulation as some have claimed, but it is
pro-education. I fully support across the board bitcoin education for
legislative and regulatory entities. Proper education is not anti-market
and I also agree with economist Peter Šurda who stated that lobbying on
behalf of Bitcoin is not necessarily anti-market. However, constructing
barriers to market entry and being complicit in certain crony
capitalism regulatory outcomes is anti-market. I will steadfastly oppose
a crony capitalism direction for the Bitcoin Foundation.

One of my primary near-term objectives for the Foundation is to
become more inclusive of the various constituencies within the global
bitcoin community. This will involve being more responsive to and
communicative with member requests. It will also involve being more open
to internationalization. Currently, 60% of the Foundation's membership
is non-US based and we need to do a better job behaving like a global
organization. To this end, we will hold the next Bitcoin conference
outside of the United States and we will sign on local Foundation
chapters in several countries where interested parties have taken the
lead on expanding the principles of Bitcoin in their region.

The bursting of Bitcoin technology on the scene at this time in
history is not a mere coincidence. It is a reaction to three separate
epochal developments largely emanating from the developed economies: (1)
centralized and oppressive monetary authority, (2) a dominant and
complicit legacy banking system, and (3) the eradication of financial
privacy.

Future generations will not be very forgiving if the Foundation
fails in its mission to standardize and protect Bitcoin worldwide. The
youth of today, including the youth of the legislative and ruling
classes, certainly grasp this movement and the demographics clearly bear
that out. Choice in currency is the free speech of commerce.

Just as those against file sharing and BitTorrent technology were on
the wrong side of history, so too are the institutional forces opposed
to unfettered bitcoin growth. The great challenge and mandate for our
time is in encouraging them to see it that way. Please join us.

I also recorded an audio interview with Let's Talk Bitcoin shortly after accepting the Executive Director position.

8 comments:

Congrats, Jon. I would argue that your three points are a subset of the breakdown of the rule of law in US during the past decade. Properly understood the 2008 crash was not a financial crisis, but a legal one. One that remains unresolved.

The status quo will not give up power and wealth without a fight. Which brings us to Bitcoin.

Given the federal government's position -- it is violation of federal law for individuals or orgs "to create private coin or currency systems to compete with the official coinage and currency of the United States" (http://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency) and digital currencies attract criminals (http://cryptome.org/2012/05/fbi-bitcoin.pdf) -- it seems obvious to me that Bitcoin can only flourish as the official currency of a nation-state.

I would love to be proven wrong, and FinCEN interactions may do that rather quickly, if Bitcoin is treated as an actual currency rather than a money service.

Seigniorage remains the life-blood of the nation-state. Choice in currency is NOT the free speech of commerce. Choice in currency kills tyrants and oligarchies dead. They know this. Be prepared.

Jeff, the federal government's position so far has not been that private currencies are illegal.

Reuben Grinberg, a lawyer who did a pretty comprehensive paper on the legal issues around Bitcoin, has spoken to a member of the prosecution team in the Liberty Dollar case, and says the only reason the federal government went after it is that, in their view, the name and insignia of the Liberty Dollar coins were similar to those of US dollar coins.

The government's position was that people were misled into thinking Liberty Dollars were U.S. issued dollars. If the coins had a different name and/or appearance, the federal government would not have prosecuted von NotHaus, according to Reuben's account of the federal government position.

Reuben was quite adamant that the federal government does not view private currencies, namely Bitcoin, as illegal, which is the position expressed by the FinCen guidance and its current director, Jennifer Calvery.

Non-governmental currencies, by themselves, can never threaten national currencies, because the real power of fiat currencies is the requirement for taxes to be paid in them, which competing currencies do not change.

Just to clarify, because I think I slightly misrepresented Reuben's position: what he was adamant about was that the arguments given by the prosecution team in the Liberty Dollar case did not apply to Bitcoin. He was not sure whether or not, at some point in the future, the federal government would find that Bitcoin was in violation of some other laws.

With the issuance of the FinCEN guidance though, that question has been settled, and the federal government has unequivocally declared that Bitcoin doesn't break any US laws.

This is good news. After hearing the positions you've expressed here, I feel a lot more comfortable about the role Bitcoin Foundation will play in the development of the currency than I did in the past.

Congratulations, Jon—no one is better qualified than you to lead the Bitcoin Foundation to achieve its mission. History is shaped by narratives (see Jonathan Gottschall's The Storytelling Animal), and I believe you have what it takes to create a global movement around a winning narrative for Bitcoin. Onward and upward!

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About Me

I am an e-Money researcher and a Founding Director of the Bitcoin Foundation. My career has included senior influential posts at Sumitomo Bank, VISA, VeriSign, and Hushmail.

"Free-market protagonists, such as Matonis, regard cybercash as better than traditional government-issued or -regulated money, because it is determined by market forces and thus nonpolitical in nature." --Robert Guttmann, Professor of Economics at Hofstra University, in Cybercash: The Coming Era of Electronic Money, 2003

"Matonis is quite correct that the new technology makes easier the use of multiple private currencies." --Mark Bernkopf, Federal Reserve Bank of New York, in "Electronic Cash and Monetary Policy", 1996

"Matonis argues that what is about to happen in the world of money is nothing less than the birth of a new Knowledge Age industry: the development, issuance, and management of private currencies." --Seth Godin in Presenting Digital Cash, 1995